Leningrad Region: Profile
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LENINGRAD REGION: PROFILE INDUSTRY THE CHEMICAL AND PETROCHEMICAL INDUSTRY The chemical and petrochemical industry includes 13 large and medium-sized enterprises, the largest of which are listed below. • OAO Fosforit; • OAO Era; • OAO Volkhov Chemical Plant; • AO Khimik; • OAO Lesogorsk Factory; • Zavod Imeni Morozova State Enterprise. The assortment of industrial product is quite wide. In 1999, the production volumes were as follows: sulfuric acid, 665,000 tons; soda ash, 163,400 tons; mineral fertilizers, 197,500 tons; synthetic resins and plastic masses, 7,300 tons. THE CONSTRUCTION MATERIALS INDUSTRY The construction materials industry of the Leningrad Region includes quarries of natural construction materials, such as ceramic clay, fireproof clay, limestone, dolomite, crushed rock, sand, and gravel, as well as factories that produce cement, lime, clay, construction ceramics, slate, roofing, brick, and concrete and ferroconcrete construction. The industry includes 35 large and medium-sized enterprises. In 1999, the production volumes were as follows: cement, 1.5 million tons; construction brick, 114 million pieces; ferroconcrete constructions, 89,100 cubic meters; ceramic facing tile, 3.4 million square meters; non-metallic construction materials, 8.7 million cubic meters. ENGINEERING AND METAL PROCESSING The engineering sector of the Leningrad Region includes over 60 large and medium-sized enterprises, which produce a wide assortment of industrial and technological products. The main corporations in the engineering sector are listed below: • The Transmash Plant; • The Luga Abrasive Plant; • The Tosno Bus Plant; • Burevestnik; • Ladoga, and a number of other enterprises. THE FUEL AND ENERGY SECTOR The fuel and energy sector forms the foundation of the Leningrad Region industrial base and is vitally important for the needs of the Northwest region. The share of fuel and energy products as a percentage of total production volume in the region is 39 percent. The fuel and energy sector of the Leningrad Region is a complex, highly developed system that produces, transports, and distributes fuel and energy. It includes the following parts: The electric power sector: The Leningrad atomic power plant (LAES) produces almost 60 percent of the power that the region needs. Since 1995, the plant has produced 16 to 21 million kWh of power per year. OAO Lenenergo is the operating company. Its largest source of electric energy is the Kirishi Main Regional Power Plant. Lenenergo is based on a 330-kV network, which links the main load units and carries electric power from the power plants. The 110-kW network and a part of the 220-kV network are the distributing networks. RAO EES Rossii owns the 330 kW through 750 kV networks, which carry the power from the Leningrad region atomic powerp lant and the Kirishi Main Regional Power Plant, connect the system to other power systems, and allow for power exports to Finland. Objects that belong to RAO EES Rossii are operated by Lenenergo. The electric networks are 3,484 km long, and their power is 14,109 MBA. THE OIL REFINING SECTOR The Kirishinefteorgsintez plant is one of the largest oil refineries in Russia. Its production capacities are loaded by almost 90 percent. The shale industry: The largest shale producing enterprise is OAO Leningradslanets. This plant also produces and sells limestone facing tile, anchor chains, spare parts for mining equipment, and other products. The Slantsy Plant does shale processing. It produces shale oil, mastic, oil polymer resins, heat, and electric energy, and fires coke. THE PEAT INDUSTRY There are 18 peat enterprises employing 2,500 people in the Leningrad Region. Their main products include cut fuel peat, cake fuel peat, peat for agriculture, peat pots, substrate peat bars, mini greenhouses, planting soil, plant foods, biohumus, and pressed nutritive soil. The gas sector: Natural gas is supplied from the United Gas Supply System of Russia. The gas supplying organization is LENTRANSGAZ, and the distributing organizations are OAO Lenoblgaz and OAAT Gatchingaz, which also provide for liquefied gas supplies. The gas distributing organizations include 13 inter-district enterprises, which have their own balance sheets. These enterprises have 42 production and technical facilities and 15 emergency and dispatching services. LIGHT INDUSTRY The light industry of the Leningrad Region includes 22 large and medium-sized enterprises. The sector leaders are listed below: • OAO Uzor; • OAZT Luzhsky Trikotazh; • ZAO Volkhovchanka; • OAO Ivteks. The light industry mainly produces fabrics, non-woven materials of fabric type, knitted goods, and clothing. THE LUMBER SECTOR Raw Materials On January 1, 2000, the total area of the forest fund was 6.1 million hectares, 4.7 million of which were covered with wood. About 42 percent of the forest fund lands of the Leningrad Region are forests with a special economy regime called Group One forests. The rest are Group Two forests that can be used for various purposes. The average species content shows that the forest fund is of a high quality; 37 percent are pine; 29 percent, fir; 26 percent, birch; eight percent, aspen and other trees. On January 1, 2000, the total wood reserve was 582 million cubic meters. The maximum annual wood production volume that can be harvested without harm to the environment is 12.3 million cubic meters. The calculated annual cut for main use is 9.8 million cubic meters. Productive potential The Leningrad Region timber sector consists of three interrelated branches, the lumbering sector, the wood processing sector, and the pulp and paper sector. The timber sector's share of the total industrial production in the region is 23 percent. Currently, there are about 770 enterprises including 70 - 80 large and medium-sized businesses, over 20 saw mills, 20 furniture enterprises, three pulp and paper mills, and five cardboard factories. Their capacities provide for over seven million cubic meters per year. The productive capacities would allow for production up to 12,000 cubic meters per year of plywood, up to 56,000 cubic meters per year of chipboard, up to 400,000 tons of cellulose, up to 420,000 tons of paper, and up to 200,000 tons of cardboard. Development perspectives The export capacity of the Leningrad Region will increase greatly after the opening of a new timber port terminal, which will require US$160 - US$190 million of investment. Its designed cargo turnover is four million cubic meters per year. The main goals of the Leningrad Region lumber sector are: • Increasing the degree of wood processing; • Providing for rational wood use; • Applying wood saving technologies; • Changing the production structure in compliance with the requirements of the domestic and foreign market; • Developing transport and information infrastructure. Promising investment projects: • Development and modernization of the Syassky Pulp and Paper Mill; • Development of the Vyborg Pulp and Paper Mill Company; • Construction of a wood processing plant in Boksitogorsk city; • Development and modernization of the timber companies in the region; • Establishment of a timber shipment company; • Establishment of a timber port terminal in Ust-Luga. THE METALLURGIC SECTOR The development of the metallurgic industry is directed by three large enterprises that are listed below. • OAO Glinozyom Pikalyovo Plant; • OAO Volkhov Aluminum; • OAO Boksitogorsky Glinozyom. Small Business Development There are almost 13 thousand small enterprises on the territory of the Leningrad Region. 128.7 thousand people are employed by this thriving sector of the regional economy (in 2003 - 121.6 thousand people). According to the Tax Ministry of the Russian Federation, by January 1, 2005 the number of individual small businessmen registered on the tax account of the Leningrad Region was 51,343 people. The Leningrad Region is second only to Saint Petersburg among the subjects of Northwest federal district in the number of small enterprises and people employed in their operation. In total, 23% of the working age population of the region is employed in small business (including the registered farms - 6032 units). The sectoral structure of the small industrial enterprises of the region is multifaceted andco vers almost all spheres of manufacture. The forestry and timber-processing industry plays a leading role among the small enterprises of the region and employs almost half of the small industry employees in the region. The mechanical engineering and metal working industry employs 22%, the food- processing industry 12%, the construction materials industry 6%. The aforementioned sectors produce more than 80% of the industrial output of all small enterprises, and their share of the people employed at the small industrial enterprises is more than 76% of the regional total. Small business in the Lengingrad Region continues to suffer fromt the inaccessibility of credit from domestic banks and complex leasing schemes necessitated by increased risk in the region and a shortage of property available for collateral. To overcome this problem, the Leningrad Regional Government has developed a new system of financial aid for small business owners which includes the creation of a system of granting the guarantees for the credits of small enterprises in commercial banks despite the absence of a hundred-per-cent mortgaging property and subsidizing the bank interest rate on credits for small businesses. This project is the first of its kind in Russia. As part of this program, the